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NJ Supreme Court to hear local lawsuit

By: - Staff Writer

File Photo The New Jersey Supreme Court has agreed to hear a lawsuit filed by five West Orange residents against the township, challenging a $6.3 million redevelopment bond issued to Prism Capital Partners LCC for the redevelopment of the Edison Battery Building at 175 Main St., above.

File Photo
The New Jersey Supreme Court has agreed to hear a lawsuit filed by five West Orange residents against the township, challenging a $6.3 million redevelopment bond issued to Prism Capital Partners LCC for the redevelopment of the Edison Battery Building at 175 Main St., above.

WEST ORANGE — The Supreme Court of New Jersey agreed Jan. 24 to hear a lawsuit from five West Orange residents against the township, in which they are challenging a $6.3 million redevelopment bond issuance.

On March 20, 2012, the West Orange Township Council passed Ordinance No. 2354-12 authorizing the issuance of the $6.3 million bond for the Edison Battery reconstruction project at 175 Main St. Prism Capital Partners LLC was hired to convert the Edison Battery Building into rental apartments as part of the Downtown Edison Redevelopment Project.

The plaintiffs in the case applied twice in April 2012 to certify a petition for a referendum on the bond issuance, but Karen Carnevale, the West Orange municipal clerk, dismissed the petitions.

The West Orange residents filing the suit are: Windale Simpson, Mark Meyerowitz, Althia Tweiten, Michael Scharfstein and Rosary Morelli. They first filed a complaint against the township May 14, 2012, claiming the ordinance passed by the township to fund the project was invalid. Their complaint was dismissed in court.

“We are very confident that we followed the spirit and the letter of the law in advancing this project,” Mayor Robert Parisi told the West Orange Chronicle last week via email.

In July 2013, the plaintiffs challenged the complaint’s dismissal, but the N.J. Appellate Division ruled in favor of the township, saying that the ordinance was exempt from the referendum sought by the plaintiffs due to the specific language of the Faulkner Act, legislation that provides N.J. municipalities with governmental direction. Under this act, bonds classified as “redevelopment area bonds” need not go to referendum.

According to the N.J. Appellate Division, a second reason for the appeal’s rejection was that the plaintiffs did not file their challenge against the ordinance in a timely manner.

The Supreme Court of New Jersey is now hearing the plaintiffs’ appeal of the N.J. Appellate Division’s July ruling. Although the court agreed to hear the case, it is leaving the previous ruling of the appellate court untouched.

The Supreme Court will consider the plaintiffs’ argument that the ordinance passed by West Orange is invalid because the township failed to apply to the Local Finance Board of the state’s Department of Community Affairs for approval of the issuance of the bonds after changes were made to the redevelopment plan.

West Orange applied and was granted approval for the redevelopment area bonds from the Local Finance Board in 2007, 2008 and 2009.

After the 2009 financial crisis, however, fundamental changes were made to the plan for the Edison Battery Building, according to the plaintiffs. In the “Statement of Facts,” which the plaintiffs submitted to the N.J. Supreme Court, they argue that the redevelopment bond ordinance passed by the West Orange Township Council was not properly approved because the amended plan was never brought before the Local Finance Board by the township.

Before the court will hear this argument, however, the plaintiffs must prove that they did in fact file their challenge of the redevelopment ordinance in a timely manner.

“The time issue, we believe, will be resolved in our favor,” Morelli, one of the plaintiffs, told the Chronicle last week via email.

According to Morelli, the plaintiffs and others who are interested and involved in the case, meet regularly as a group to track the progress of the case and make decisions together.

Simpson, dubbed the petitioners’ spokesperson, told the Chronicle via email that the five plaintiffs and 2,600 petition signers compose this group, the Citizens for Responsible Government Spending.

John Schmidt, a resident who has previously run for the position of West Orange mayor, has been involved with the group and has supported the plaintiffs despite not filing suit with them, according to Morelli.

Schmidt told the Chronicle in a phone interview two weeks ago that he was not too concerned about the plaintiffs convincing the court that their challenge against the ordinance was not time-barred.

“We’re going to argue that we played by the rules,” said Schmidt.

Schmidt said that he considers it significant that the Supreme Court is taking the case, as, according to him, approximately 90 percent of requests the court receives for judicial review are not accepted.

The plaintiffs’ main legal concern is that the bond for the construction was never checked or approved. According to Schmidt, who told the Chronicle he had helped the plaintiffs pen the Statement of Facts for the suit, if the bond is not a Redevelopment Act Bond, the municipal residents should have the opportunity to vote on it; and if it is, it should be submitted to the N.J. Department of Community Affairs for approval.

Morelli told the Chronicle that she and the other plaintiffs simply want the New Jersey court to enforce their right for government-issued debt to be reviewed, whether by the DCA or by referendum.

“We want the laws of the state of New Jersey adhered,” Schmidt said.
According to Simpson, the plaintiffs and petitioners are “against the issuance of $6.3 million dollars of tax payers’ monies to a private developer.”

The best outcome for the plaintiffs would be that the N.J. Supreme Court agrees with their argument, and the township of West Orange repeals the ordinance, Simpson said.

When the ordinance to authorize the issuance of the bond was first introduced in March 2012, so many residents expressed interest in the matter that the West Orange Township Council meeting had to be moved to the Washington Elementary School Auditorium, Morelli said.

“The overwhelming number of taxpayers, who spoke so strongly, objected to a project that would dramatically increase the number of residents and increase the number of vehicles on the streets of an already congested neighborhood,” Morelli said about the meeting.

Morelli said that she and others are concerned that residents of the new rental apartments would pay little or no municipal taxes because of tax abatements and interest subsidies, and would considerably increase municipal and school board expenses.

According to a press release from Prism, the Edison Battery Building will be converted into 331 residential units in a range of sizes. This renovation is supposed to be the first phase of a $230 million project, encompassing 21 acres in the Downtown Redevelopment Area.

“We are very excited about this project getting started,” Parisi told the Chronicle. “I have believed, and continue to believe in this project and what it will mean for the downtown and the entire community.”

Parisi said that he is confident that the project will benefit West Orange in many ways.

“Any strong addition or revitalization to any neighborhood in town is a benefit to the entire town,” Parisi told the Chronicle.

Prism has come under fire several times in the past two years for failure to pay property taxes on the several properties the redeveloper owns in West Orange, including the Edison Battery property.

As previously reported by the Chronicle, the West Orange administration submitted a letter to Prism in October 2012 through its redevelopment counsel regarding the company’s default on property taxes at 175 Main St. Prism did not respond to the letter, but paid the owed taxes after receiving it.

As of press time, according to the West Orange Property Tax Site found on the West Orange Township website, Prism is currently delinquent in its payment of taxes owed on the Edison Battery Building at 175 Main St. in the amount of $224,503.62 for its first-quarter and second-quarter tax bills for 2014. The payment for the first quarter was due Feb. 1; the payment for the second quarter is not due until May 1. All four quarterly tax bills for 2013 have been paid in full.

As of press time, the local plaintiffs were awaiting a date for their appearance in Supreme Court.

Posted by on March 10, 2014. Filed under WEST ORANGE. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.